All six principles

Principle 01 of 06

Own the picks and shovels

In a gold rush, the surest money was made selling the tools.

The idea

When the California gold rush began in 1848, most prospectors went home with nothing. The people who reliably got rich sold the picks, shovels, denim and supplies every miner needed - whoever struck gold.

AI is a modern gold rush. Hundreds of companies are racing to build the winning chatbot, agent or model, and most will fail. But every one of them - winners and losers alike - has to buy the same things: chips, memory, data-centre space, networking, cooling and electricity.

Why it matters

Picking the winning AI application is extremely hard; even experts disagree. Owning the infrastructure layer turns an unanswerable question (“who wins?”) into a far more answerable one (“will total AI spending keep growing?”). That shift in question is the foundation of the whole portfolio.

How I applied it

Across the four-year journey

  1. 2022

    Built my first core positions in semiconductors and chip equipment - the most fundamental ‘shovels’ of all.

  2. 2023

    As demand exploded, added high-bandwidth memory and accelerator exposure rather than chasing app-layer start-ups.

  3. 2024

    Extended the idea down the supply chain into networking, optics, cooling and data-centre real estate.

  4. 2025

    Recognised electricity as the newest ‘shovel’ and built a dedicated power and grid sleeve.

In practice

My working rules

  • ✓Ask “what does every AI company have to buy?” before “which AI company will win?”
  • ✓Prefer suppliers with pricing power and long order backlogs.
  • ✓Look one or two steps down the supply chain - that’s often where value hides.
  • ✓Keep a smaller allocation to applications for upside, but let infrastructure be the core.

Watch out

The trap: shovels can be overbuilt too

Infrastructure is cyclical. When capacity outruns demand, even great suppliers can fall hard. That’s why this principle never works alone - it’s paired with following the capex and trimming euphoria.

Key takeaway

“You don’t need to find the gold. You need to own what everyone digging for it has to buy.”